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• Principles of Internet Marketing, 2000, South-Western College Publishing (華泰 )– Ward Hanson
Topics
• The original WWW• Commercial beginnings• A .com world• Marketing and technology• Our approach in the book
The Original WWW
• It’s 1922• Radio suddenly transitions from a
technology used primarily by the military and the shipping industry to a consumer and business phenomenon
• At the end of 1921, there are 5 radio stations
• A year later, there are 575• Starting radio stations is the height of
entrepreneurship• Listening to radio is a runaway consumer fad• “Combing the ether” is the hit of the day
The Original WWW
• Radio’s impact on 1920s society– It changes the way people think about
distance and time– Simultaneity no longer requires proximity– Global events are experienced as they
happen– Performances in different cities can be
heard in the neighbor’s living room– Fast-breaking world stories and even the
local weather are available at the flip of a switch and the turn of the dial
The Original WWW
• Radio changed business, especially marketing– It accelerated the economy’s transition to a
mass market– It facilitated the creation of national brands– Firms could launch national marketing
campaigns simultaneously– New product store introductions could be
synchronized with ad campaigns to build consumer interest
– Product positioning became more flexible
• Businesses learned to use this new, powerful method of reaching customers
The Original WWW
• As an industry, radio struggled with generating a self-sustaining revenue base– In 1926, radio stations were failing at a rate of
15% per month– Consumers still rushed to buy radios– Ultimately, national networks of stations
emerged– A combination of national and local
advertising made radio profitable
• Internet marketing shows many of these same uncertainties
The Original WWW
• The Internet changes the way companies connect to their customers
• It expands the opportunities for branding, innovation, pricing, and selling
• It leads to new ways of thinking about time and distance
• It opens up new distribution channels and markets
Virtuous Web Cycle
Huh?
• Is a business system with positive feedback
• Each element in the business system feeds off another element in the system and feeds into yet another element in the system
• If the cycle is strong enough, it can actually be a self-fulfilling expectation
Virtuous Cycle for Net Growth
Let’s look at how it works
Popular Fascinati
on
• It starts with user fascination
Web Sites and
Web Content
• Providers see the developing opportunity and rush to create new brands & services, which creates more hype
Consumer and
Business Internet Access
• The buzz feeds back into consumers’ interest and desire to experiment with the new technology
A Dot Com World
• The virtuous Web cycle leads to rapid growth of – Consumer access– Internet usage– Content online
Consumer Access
• The past five years have seen rapid growth in – Network size– Users on networks– Network activity
• Between January 1994 and January 1999, Internet hosts grew from 2.2 million to over 43 million
• A 46% growth rate in 1998
Figure 1.4
Online Access Growth in Net Hosts
Growth of World Wide Web Domains
0
10
20
30
40
50
Mill
ions
46% growth in 1998
Consumer Access• The Internet user base
has grown rapidly as well
• Worldwide, the number of users was estimated to be > 160 million in March, 1999
• Over 90% of the users on the Net have joined in the last 5 years
• More growth is possible, as < 4% of the world’s adult population is online
• 50% of users think the Net is a “necessity”
Figure 1.5
Worldwide Online Population – Continuing
Fascination
The art of estimating the number of people online throughout the world is inexact. An “educated guess” as of May 1999 is 165 million.Source: NUA
HOW MANY ONLINE?
Consumer Access• Spring 1998, the size of
the Web was estimated at 300 million pages
• Growth rates in content exceed growth rates in Web access and the number of users
• From June 1997 to March 1998, Web content grew at 120%
• More importantly, the types and creativity of Web site content have blossomed
Figure 1.6
Rapid Growth in Web Content
1
16
28
42
35
90
125
2
25
30
80
100
160
200
2
35
33
100
110
195
275
0 50 100 150 200 250 300
Pages found in all 4engines
Infoseek
Excite
HotBot
Alta Vista
Pages found in at leastone of the four engines
Size of static web
Size in millions of distinct static pages
1997
1998
1999
Innovative Applications
• Stage I: Publishing sites
• Stage II: Databases and Forms
• Stage III: Personalization
Stage I: Publishing SiteFigure 1.7
Info Links
http://www.france98.com/french/index.html
Pictures/Information
Stage II: Databases and Forms
Figure 1.8
To find out the travel distances between the host cities:
Select your starting point
Select your destination
Bordeaux
Paris
Toulouse
Marseilles
Toulouse Marseille – 404km
Stage II
What Makes this a Stage II Website?
Ability to retrieve information to respond
to user requests
Stage III: Personalization
Figure 1.11
If you area team WC98 member and are using a computer other than the one you originally joined WC98, enter your nickname and password now.
Consumer-to-Consumer Commerce
• Businesses deploy chat room technology – Enables consumers to interact directly
with each other– Accelerates word of mouth– Facilitates consumer-to-consumer
commerce•eBay•Yahoo! Auctions
Consumer-to-Consumer Commerce
• Consumer-to-consumer sites must build trust– Systems that rate seller credibility– Verify identities of buyers and sellers– Insurance against fraud– Escrow accounts to ensure products are shipped– Bans on sellers who bid on their own products– Bans on buyers who win, but don’t complete the
sale
• Successful auction sites blur the distinction between business and fun
Business-to-Business Commerce
• $ volume much larger than retailing, and more rapidly growing
• Intra & extranets provide a seamless link between businesses and their suppliers
• Companies create in-depth Web sites for their main customers– Special pricing– Special configurations– Dedicated support
• This builds loyalty and repeat purchases
Marketing Evolves as Technology Changes
• Technological innovation brought about the factory system & enabled mass production– Marketing emphasis was on logistics & supply
chain management
• Radio enabled national roll-out of brands– Marketing emphasis was on selling
• Television coincided with the product & brand management system of marketing
• Mainframe computers enabled new methods of segmentation & customer management
• The Internet enables mass customization